Investors applaud Biogen, punish Elan on deal

Biogen to assume control of multiple-sclerosis drug Tysabri

LOS ANGELES (MarketWatch) — Investors applauded Biogen Idec Inc.’s plan to assume the rights to the multiple-sclerosis drug Tysabri from Elan PLC for $3.25 billion by boosting Biogen stock to an all-time high while punishing Elan shares in early trading Wednesday.

Reuters

A pedestrian passes the sign outside the headquarters of Biogen Idec Inc. in Cambridge, Massachusetts June 18, 2008.

Biogen
BIIB, +0.56%
stock jumped $3.62 to $160.98, a gain of more than 2%, on the news, which would end the company’s previous 50-50 split arrangement with Elan for the drug. But Elan
US:ELN
shares tumbled more than 10% to $9.40.

Biogen is estimating that the deal will lift 2013 earnings by 20 to 30 cents a share for GAAP, and 50 to 60 cents a share non-GAAP.

One analyst suggested that Biogen is looking down the road on its own exclusive MS treatment known as BG-12.

“I believe Biogen’s board is intensely aware that the long term future of the company depends in part on how they deal with the eventual loss of patent exclusivity on BG-12 sometime in the mid/late-2020s,” Mark Schoenebaum of ISI Group said in a note to clients. “By that point, BG-12 could be the dominant MS therapy. And then it will suddenly go to zero.”

John Sonnier of William Blair applauded the deal.

“We like this transaction because it gives Biogen Idec control over Tysabri and further simplifies operations with the drug. We also believe this purchase represents a good use of cash and note that a majority of the cash used to make the up-front payment will come from international cash,” he said in a note.

Intraday Data provided by SIX Financial Information and subject to terms of use.
Historical and current end-of-day data provided by SIX Financial Information. Intraday data
delayed per exchange requirements. S&P/Dow Jones Indices (SM) from Dow Jones & Company, Inc.
All quotes are in local exchange time. Real time last sale data provided by NASDAQ. More
information on NASDAQ traded symbols and their current financial status. Intraday
data delayed 15 minutes for Nasdaq, and 20 minutes for other exchanges. S&P/Dow Jones Indices (SM)
from Dow Jones & Company, Inc. SEHK intraday data is provided by SIX Financial Information and is
at least 60-minutes delayed. All quotes are in local exchange time.